Consider the following statements:

The ‘Corporate Debt Market Development Fund’ (CDMDF) is a backstop facility for specified debt funds during market dislocations.

The fund is guaranteed by National Credit Guarantee Trust Company (NCGTC).

The backstop facility will be managed by SEBI.

Which of the statements given above is/are correct?

Question

The ‘Corporate Debt Market Development Fund’ (CDMDF) is a backstop facility for specified debt funds during market dislocations.
The fund is intended to provide liquidity support in the event of a financial crisis along the lines of what took place in 2008.
It aims to instil confidence amongst the participants in the corporate bond market and to generally enhance secondary market liquidity.
The proposed CDMDF will have an initial corpus of Rs 3,000 crore contributed by mutual funds.
The government has approved a 10-time leverage of the fund (Additional corpus), thus CDMDF may raise funds up to Rs 30,000 crore.
Contributions to the fund can be done by the specified debt-oriented mutual fund schemes and asset management companies of mutual funds.
The fund is guaranteed by National Credit Guarantee Trust Company (NCGTC).
The backstop facility will be managed by SBI Mutual Fund.
Specified mutual fund schemes will have access to the fund for selling securities during market dislocation. This access is proportional to the contribution made to the fund at a mutual fund level.

GKToday Admin · Accepted Answer

Only 1 & 2

The ‘Corporate Debt Market Development Fund’ (CDMDF) is a backstop facility for specified debt funds during market dislocations.
The fund is intended to provide liquidity support in the event of a financial crisis along the lines of what took place in 2008.
It aims to instil confidence amongst the participants in the corporate bond market and to generally enhance secondary market liquidity.
The proposed CDMDF will have an initial corpus of Rs 3,000 crore contributed by mutual funds.
The government has approved a 10-time leverage of the fund (Additional corpus), thus CDMDF may raise funds up to Rs 30,000 crore.
Contributions to the fund can be done by the specified debt-oriented mutual fund schemes and asset management companies of mutual funds.
The fund is guaranteed by National Credit Guarantee Trust Company (NCGTC).
The backstop facility will be managed by SBI Mutual Fund.
Specified mutual fund schemes will have access to the fund for selling securities during market dislocation. This access is proportional to the contribution made to the fund at a mutual fund level.

Current Affairs